Results of mBank Group Q1 2017 Promising start to the year with - - PowerPoint PPT Presentation

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Results of mBank Group Q1 2017 Promising start to the year with - - PowerPoint PPT Presentation

Nov 01, 2022 690 likes •1.25k views

Results of mBank Group Q1 2017 Promising start to the year with strong operating results Management Board of mBank S.A. Investor Presentation April 27, 2017 Key highlights of Q1 2017 Core income of PLN 998.6 M Strong total revenues close

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Results of mBank Group Q1 2017

Promising start to the year with strong operating results

Management Board of mBank S.A. Investor Presentation April 27, 2017

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SLIDE 2

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Key highlights of Q1 2017

Strong total revenues exceeding PLN 1.08 B Net Profit of PLN 218.8 M,

  • 25.2% compared to Q4/16

Business development Volumes Profit & Loss Capital & Liquidity

Selective volume growth

  • Gross loans at PLN 84.5 B

(-0.1% QoQ, +4.4% YoY)1

  • Customer deposits at PLN 88.7 B

(-2.8% QoQ, +8.7% YoY)1

Focus on higher margin lending

  • Mortgage loan sales at PLN 0.8 B in

Q1/17 (+12% YoY); non-mortgage loan sales at PLN 1.8 B (+34% YoY)

Accelerating client acquisition

  • 5,447 thou. retail clients (+410
  • thou. YoY) and 21,235 corporate

clients (+1,243 YoY)

Solid efficiency maintained

  • Cost/Income ratio at 53.4%

Core income of PLN 998.6 M close to historical heights

  • NII at PLN 749.0 M (+10.7% YoY),
  • n improved margins
  • NFC at PLN 249.6 M (+17.9% YoY),
  • n rising customer business

Capital ratios well above regulatory requirements

  • CET 1 Ratio at 18.8%/22.1%2
  • Total Capital Ratio at 21.6%/25.4%2

Diversification of funding

  • New issue under EMTN programme

Sound deposit base

  • Loan-to-Deposit ratio at 92.1%

1 Volume dynamics presented excl. reverse repo / buy-sell-back transactions and repo transactions, respectively; 2 Stand-alone capital ratios;

Strengthening the position as mobile and transactional bank

  • Enhanced mobile application and

new mCompanyNet platform

  • Launch of mBank’s FinTech fund

Investor Presentation – Q1 2017

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SLIDE 3

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Agenda

Summary of Q1/17 in mBank Group

Key Financials Client acquisition and Market shares Development of retail and corporate new business

Analysis of Q1/17 Results

Development of Loans and Deposits Development of Income and Costs Loan Portfolio Quality Funding Structure Details Capital and Liquidity Ratios

Macroeconomic Update Appendix

Additional Information: Selected Financial Data Detailed Results of Business Lines

Investor Presentation – Q1 2017

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SLIDE 4

PLN million

Q1/16 Q4/16 Q1/17

change QoQ change YoY

Net interest income

676.4 753.3 749.0

  • 0.6%

+10.7% Net fee and commission income

211.7 250.6 249.6

  • 0.4%

+17.9% Total income

1,008.9 1,044.7 1,081.8

+3.5% +7.2% Total costs (excl. BFG)

  • 443.6
  • 442.7
  • 445.5

+0.6% +0.4% Contributions to the BFG

1

  • 37.1
  • 49.2
  • 132.2
  • Loan Loss Provisions
  • 68.5
  • 39.7
  • 82.9

+109.0% +21.0% Operating profit

459.6 513.1 421.2

  • 17.9%
  • 8.4%

Taxes on the Group balance sheet items

  • 57.3
  • 92.8
  • 91.3
  • 1.6%

+59.3% Profit before income tax

402.3 420.3 329.9

  • 21.5%
  • 18.0%

Net profit

307.8 292.5 218.8

  • 25.2%
  • 28.9%

Net Interest Margin (NIM)

2.29% 2.35% 2.42%

+0.07 p.p. +0.12 p.p. NIM excl. CHF portfolio

2.66% 2.69% 2.77%

+0.08 p.p. +0.11 p.p. Cost/Income ratio

47.7% 47.1% 53.4%

+6.3 p.p. +5.7 p.p. Cost of Risk

0.35% 0.20% 0.41%

+0.21 p.p. +0.06 p.p. Return on Equity (ROE)

10.1% 9.8% 6.8%

  • 3.0 p.p.
  • 3.3 p.p.

Return on Assets (ROA)

0.99% 0.88% 0.68%

  • 0.20 p.p.
  • 0.31 p.p.

|4

1 Q4/16 contributions include additional payment to the Bank Guarantee Fund related to the bankruptcy of Cooperative Bank in Nadarzyn of PLN 10.9 million;

Q1/17 contributions consist of annual payment to the Resolution Fund of PLN 116.8 million and quarterly payment to the Deposit Guarantee Scheme of PLN 15.4 million;

Key Financials: Profit and Loss Account

Summary of Q1/17 in mBank Group

Investor Presentation – Q1 2017

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PLN million

Q1/16 Q4/16 Q1/17

change QoQ change YoY

Total assets

123,268 133,744 130,488

  • 2.4%

+5.9% Gross loans to customers

80,925 84,581 84,538

  • 0.1%

+4.5% Retail client loans

46,511 48,950 48,338

  • 1.2%

+3.9% Core corporate client loans1

32,801 34,118 34,759

+1.9% +6.0% Amounts due to customers

81,134 91,418 88,744

  • 2.9%

+9.4% Retail client deposits

47,835 53,495 53,829

+0.6% +12.5% Core corporate client deposits1

31,771 35,783 32,080

  • 10.3%

+1.0% Total equity

12,627 13,051 13,338

+2.2% +5.6% Loan to Deposit ratio

96.1% 89.4% 92.1%

+2.6 p.p.

  • 4.0 p.p.

NPL ratio

5.8% 5.4% 5.2%

  • 0.2 p.p.
  • 0.6 p.p.

Coverage ratio

58.6% 57.1% 59.4%

+2.3 p.p. +0.7 p.p. Common Equity Tier 1 Ratio

16.2% 17.3% 18.8%

+1.5 p.p. +2.6 p.p. Total Capital Ratio

19.0% 20.3% 21.6%

+1.3 p.p. +2.6 p.p. |5

Key Financials: Balance Sheet

1 Excluding reverse repo / buy-sell-back transactions for loans and repo transactions for deposits;

Investor Presentation – Q1 2017

Summary of Q1/17 in mBank Group

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Retail Banking PL mBank CZSK Orange Finance

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Business Development: Client acquisition and Market shares

Number of Retail Clients (thou.) Number of Corporate Clients +295 +1,243

12/16

20,940 12,750 6,067 2,123

09/16

20,695 12,559 5,987 2,149

06/16

20,220 12,199 5,883 2,138

03/16

19,992 11,944 5,896 2,152

03/17

21,235 12,362 6,770 2,103

K1 K2 K3

Market shares in Retail Banking segment Market shares in Corporate Banking segment

12/16 10.1% 6.1% 09/16 9.6% 6.2% 06/16 10.0% 6.3% 03/16 9.8% 6.3% 12/15 9.8% 6.3% 09/15 10.1% 6.3% 06/15 9.7% 6.4% 03/15 8.9% 6.3% 03/17 6.2% 9.8%

Deposits Loans

03/17 6.0% 6.5% 12/16 6.1% 6.5% 09/16 6.0% 6.5% 06/16 5.9% 6.6% 03/16 5.8% 6.5% 12/15 5.7% 6.5% 09/15 5.4% 6.5% 06/15 5.4% 6.6% 03/15 5.3% 6.5%

Deposits Loans

910 893 877 866 842 +99 +410

12/16

5,348 4,181 275

09/16

5,250 4,123 250

06/16

5,146 4,046 234

03/17

5,447 4,241 296

03/16

5,037 3,979 216

Note: Corporate clients split: K1 – annual sales over PLN 500 M and non-banking financial institutions; K2 – annual sales PLN 30 M to PLN 500 M; K3 – annual sales below 30 M.

Investor Presentation – Q1 2017

Summary of Q1/17 in mBank Group

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382 436 398 403 514 998 841

+19%

+34%

Q1/17

1,801 1,131 156

Q4/16

1,514 114

Q3/16

1,560 1,041 121

Q2/16

1,725 1,155 133

Q1/16

1,344 121 Sales of mortgage loans (PLN M, by quarter) Sales of non-mortgage loans (PLN M, by quarter)

Individuals Entrepreneurs mBank CZSK

Development of Retail and Corporate new business

Sales of corporate loans (PLN M, by quarter) New leasing contracts (PLN M, by quarter)

28% 9% 63%

mBank CZSK Individuals mBank Hipoteczny Entrepreneurs

928 +12% +22%

Q1/17

1,129

Q4/16 Q3/16

1,027

Q2/16

1,066

Q1/16

1,011

28% 9% 63%

Note: Corporate clients split: K1 – annual sales over PLN 500 M and non-banking financial institutions; K2 – annual sales PLN 30 M to PLN 500 M; K3 – annual sales below 30 M.

K3 K2 K1 9% 14% 1% 76%

224 382 473 511 607 235 228 173 110 120 111 +12%

+14%

Q1/17

798 9 71

Q4/16

702 13 68

Q3/16

691 34 63

Q2/16

759 59 90

Q1/16

713 81

12% 33% 24% 31%

313 299 624 560 916 777 389 380 +17%

  • 13%

Q1/17

2,167 256 1,134

Q4/16

2,496 1,191

Q3/16

2,298 1,357

Q2/16

2,100 1,163

Q1/16

1,845 288 1,258 Investor Presentation – Q1 2017

Summary of Q1/17 in mBank Group

  • 13%

+14% +19%

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Agenda

Summary of Q1/17 in mBank Group

Key Financials Client acquisition and Market shares Development of retail and corporate new business

Analysis of Q1/17 Results

Development of Loans and Deposits Development of Income and Costs Loan Portfolio Quality Funding Structure Details Capital and Liquidity Ratios

Macroeconomic Update Appendix

Additional Information: Selected Financial Data Detailed Results of Business Lines

Investor Presentation – Q1 2017

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SLIDE 9

+1.1% +3.6% +6.0% 41% 2% 57% +2.0%

|9

Development of Loans to Customers

Loan growth focused on higher-margin products

Development of Gross Loans and Advances to Customers (PLN M)

+4.3%

  • 0.1%

+4.5%

03/17

84,538 48,338 34,841 1,360

12/16

84,581 48,950 34,174 1,457

09/16

84,199 48,119 34,528 1,552

06/16

83,862 48,272 33,937 1,653

03/16

80,925 46,511 32,805 1,609

Individual clients Corporate clients Public sector & Other receivables

  • 1.2%

+3.9%

03/17

48,338 34,207 2,326 11,804

12/16

48,950 35,369 2,350 11,231

09/16

48,119 34,624 2,345 11,150

06/16

48,272 35,220 2,532 10,520

03/16

46,511 34,107 2,507 9,897 +1.9% +6.2%

03/17

34,841 34,759 81

12/16

34,174 34,118 57

09/16

34,528 34,466 62

06/16

33,937 33,805 132

03/16

32,805 32,801 4

Core loans to corporates Reverse repo transactions Mortgage loans: to Individuals to Microfirms

+X.X%

Excluding Reverse repo / buy-sell-back transactions

+X.X%

Excluding FX effect 41% 2% 57% Non-mortgage loans

Analysis of Q1/17 in mBank Group

Investor Presentation – Q1 2017

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SLIDE 10

38% 1% 61% +1.0%

  • 2.8%

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Development of Deposits

Intentional outflow of corporate term deposits, growth in current accounts

Development of Amounts due to Customers (PLN M)

+8.7%

  • 2.9%

+9.4%

03/17

88,744 53,829 33,551 1,364

12/16

91,418 53,495 37,383 540

09/16

85,188 50,735 33,829 624

06/16

85,302 49,453 35,119 731

03/16

81,134 47,835 32,618 681

Individual clients Corporate clients Public sector

+X.X%

Excluding Repo transactions

+0.6% +12.5%

03/17

53,829 39,178 14,651

12/16

53,495 38,114 15,381

09/16

50,735 35,498 15,237

06/16

49,453 35,104 14,349

03/16

47,835 33,563 14,272

Core corporate deposits Repo transactions Sight deposits Term deposits 40% 1% 59%

  • 10.3%

+2.9%

03/17

33,551 32,080 1,471

12/16

37,383 35,783 1,600

09/16

33,829 31,818 2,011

06/16

35,119 33,832 1,287

03/16

32,618 31,771 847 Investor Presentation – Q1 2017

Analysis of Q1/17 in mBank Group

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Income of mBank Group

Development of mBank Group’s Income (PLN M) +3.5%

Q4/16

1,044.7 753.3 250.6 0.3 26.6

Q3/16

1,038.7 718.7 234.4 0.4 74.4 2.4

Q2/16

1,203.0 684.4 209.7 2.6 59.5 244.8 2.0

Q1/16

1,008.9 676.4 211.7 0.0 84.1 3.4 33.2

Q1/17

+7.2% 4.5 1.6 249.6 1,081.8 749.0 0.2 76.9

Net Interest Income Net Fee and Commission Income Dividend Income Net Trading Income Gains less Losses from Investment Securities1 Net Other Operating Result

  • 0.6%
  • 0.4%

+189% +10.7% +17.9%

  • 8.6%

High core revenues despite a seasonally weaker quarter

QoQ YoY

1 Including one-off gain on the settlement of Visa transaction (PLN 251.7 M) in Q2/16;

8.5 3.1 10.8 Investor Presentation – Q1 2017

Analysis of Q1/17 in mBank Group

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SLIDE 12

+0.6% +0.4%

|12

Costs of mBank Group

Development of mBank Group’s Costs (PLN M) 116.8 +20.2% 51.1 164.2 223.3 7.0 +17.4%

Q4/16

491.9 220.4 168.4 0.0 53.9 38.3 10.9

Q3/16

499.9 219.5 183.3 6.1 52.7 38.3

Q2/16

490.7 218.9 158.8 12.6 63.4 37.0

Q1/16

480.8 217.9 160.9 11.2 53.7 37.1 15.4

Q1/17

577.7

+1.3%

  • 2.5%

+2.5% +2.0%

Solid cost efficiency despite contributions to the BFG

  • 5.1%
  • 4.9%

47.7%

C/I ratio of mBank Group (quarterly)

40.8% 48.1% 47.1% 53.4%

1 Including taxes and fees, contributions to the Social Benefits Fund;

QoQ YoY

Personnel Costs Material Costs Other Costs1 Amortization Contributions to the BFG

  • Q4/16 costs include additional payment to the BFG related to the

bankruptcy of Cooperative Bank in Nadarzyn of PLN 10.9 million.

  • Q1/17 costs include annual contribution to the Resolution Fund
  • f PLN 116.8 million.

Excluding contributions to the BFG and one-off regulatory costs

+X.X%

45.3%

Normalized C/I ratio of mBank Group for Q1/17

Investor Presentation – Q1 2017

Analysis of Q1/17 in mBank Group

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SLIDE 13

Retail Portfolio Corporate Portfolio mBank Group’s Cost of Risk:

20 55 69 47 59 35 35 41 41 46

|13

Loan Loss Provisions and Risk Costs

Net Impairment Losses on Loans and Advances (PLN M) mBank Group’s Cost of Risk by Segment (bps) 68.5 64.7 3.8

Q3/16

139.5 74.4 65.0

Q2/16

117.7 75.6 42.1

Q1/16

+21.0% +109%

Q1/17

82.9 78.5 4.4

Q4/16

39.7 70.2

  • 30.5

Retail Banking Corporates and Financial Markets

66

Q1/16

5 58

  • 35

60

Q3/16

76 64

Q2/16

50

Q1/17

5 67

Q4/16

quarterly YtD

Cost of risk driven by low provisions in the corporate segment

Investor Presentation – Q1 2017

Analysis of Q1/17 in mBank Group

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Loan Portfolio Quality

mBank Group’s Impaired Loans Portfolio (PLN M)

  • 5.8%
  • 3.2%

03/17

4,393

12/16

4,537

09/16

4,949

06/16

4,846

03/16

4,663

  • incl. IBNR provisions

03/17

64.7% 59.4%

12/16

62.1% 57.1%

09/16

64.4% 59.5%

06/16

63.7% 58.5%

03/16

64.0% 58.6% mBank Group’s Coverage Ratio mBank Group’s NPL Ratio

03/17

5.2%

12/16

5.4%

09/16

5.9%

06/16

5.8%

03/16

5.8%

* excl. Reverse repo / buy-sell-back transactions * to Private Individuals in Poland

NPL Ratio of Mortgage Loan Portfolio* mBank Group’s NPL Ratio by segment

03/17

3.7%

12/16

3.7%

09/16

3.8%

06/16

3.8%

03/16

3.8%

03/17

5.4% 5.2%

12/16

5.2% 5.8%

09/16

5.7% 6.5%

06/16

5.6% 6.4%

03/16

5.7% 6.2%

Retail Portfolio Corporate Portfolio* mBank Group applies a conservative client-

  • riented approach in

its methodology of NPL recognition.

Resilient loan portfolio quality reflected in improving risk indicators

Investor Presentation – Q1 2017

Analysis of Q1/17 in mBank Group

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SLIDE 15

200 776 250 500 200 200 50 750 50 750 1,000

76%

Due to banks

|15

Funding Structure Details

A well diversified funding profile and highly liquid balance sheet

mBank Group’s funding structure as of 31.03.2017 mBank’s ratings Loan-to-Deposit Ratio Corporate deposits Other debt securities in issue Subordinated liabilities Other EMTN Retail deposits Fitch

Long-term rating

BBB

Short-term rating

F2

Standard & Poor’s

Long-term credit rating

BBB+

Short-term credit rating

A-2

Summary of Issues under Euro Medium Term Note (EMTN) Programme Issue size Issue date Maturity date Tenor Coupon CHF 200 M 08-10-2013 08-10-2018 5.0 Y 2.500% EUR 500 M 01-04-2014 01-04-2019 5.0 Y 2.375% EUR 500 M 26-11-2014 26-11-2021 7.0 Y 2.000% EUR 500 M 26-09-2016 26-09-2020 4.0 Y 1.398% CHF 200 M 28-03-2017 28-03-2023 6.0 Y 1.005% +2.6 pp

03/17

92.1%

12/16

89.4%

09/16

95.1%

06/16

94.7%

03/16

96.1%

CHF Loans CHF Subloans EUR Loans EUR EMTN CHF EMTN

Maturity of long-term funding instruments in original currencies as of 31.03.2017 (LC in million) Investor Presentation – Q1 2017

Analysis of Q1/17 in mBank Group

2017 2018 2019 2020+

46% 30% 7% 4% 7% 2% 4%

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SLIDE 16

(PLN B)

|16

Key Regulatory Ratios

mBank Group’s Total Capital Ratio mBank’s NSFR and LCR

12/16

199% 114%

09/16

151% 114%

06/16

150% 109%

03/16

139% 112%

03/17

168% 116%

Basel III requirement ≥100%

Strong capital ratios well above regulatory requirements

minimum requirement as of 03/17

17.02% 13.21%

12/16

20.29% 17.32% 2.97%

09/16

18.61% 15.88% 2.73%

06/16

18.33% 15.61% 2.72%

03/16

19.01% 16.20% 2.81%

03/17

21.59% 18.76% 2.83%

Net Stable Funding Ratio (NSFR) Liquidity Coverage Ratio (LCR) CET 1 capital ratio Tier 2 Total risk exposure amount

XX.X

69.1 64.6 71.4 71.3 65.31

1 Due to the adjustment of the application of the regulatory floor to the requirements of article 500 CRR and the extensions of the AIRB approach;

Note: On 04.10.2016 the Polish FSA identified mBank as an other systemically important institution and imposed on the bank an additional buffer at 0.5% of total risk exposure amount.

Investor Presentation – Q1 2017

Analysis of Q1/17 in mBank Group

slide-17
SLIDE 17

|17

Agenda

Summary of Q1/17 in mBank Group

Key Financials Client acquisition and Market shares Development of retail and corporate new business

Analysis of Q1/17 Results

Development of Loans and Deposits Development of Income and Costs Loan Portfolio Quality Funding Structure Details Capital and Liquidity Ratios

Macroeconomic Update Appendix

Additional Information: Selected Financial Data Detailed Results of Business Lines

Investor Presentation – Q1 2017

slide-18
SLIDE 18

The economy rebounded strongly in Q1/17

|18

Macroeconomic Update (1/2)

The economy set to grow by 4% on average in 2017

Tighter labour market across the board, supporting consumption GDP forecast (% YoY) Inflation spike over, but core inflation is trending up

Source: GUS

2017 began on a positive note, with further acceleration in all monthly measures of economic activity. In particular, investment is rebounding faster than previously anticipated. The bank revised its GDP forecasts upwards, Q1/17 data was one of the factors behind this. Now the growth is expected to accelerate to 4.0% on average in 2017 with strong contribution from investment. The biggest economic story in Poland is probably on the labour market: tight conditions, record low unemployment, accelerating wage growth. This bodes well for consumption. Local peak in inflation in February. The uptrend in core inflation means, however, that inflation will continue to rise once the effects of oil spike fade away.

Source: GUS, NBP Source: GUS, NBP Source: GUS, NBP

Investor Presentation – Q1 2017

  • 2%
  • 1%

0% 1% 2% 3% 4% 5% 2013 2014 2015 2016 2017 Repo rate CPI inflation Core inflation Repo rate forecast CPI forecast Core CPI forecast 0.0 0.5 1.8 2.6 3.1 3.3 3.4 3.3 3.8 3.3 3.6 4.6 2.9 3.0 2.4 2.5 3.6 3.8 4.0 4.4

  • 3
  • 2
  • 1

1 2 3 4 5 6

Q1/13 Q3/13 Q1/14 Q3/14 Q1/15 Q3/15 Q1/16 Q3/16 Q1/17 Q3/17

Investment Net exports Consumption Inventories GDP YoY (%) mBank’s forecast

  • 2
  • 1

1 2 3 4

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

No of job offers per unemployed Enterprises reporting staffing problems, weighted avg

  • 30%
  • 20%
  • 10%

0% 10% 20%

  • 2%

0% 2% 4% 6% 8%

Q1/13 Q3/13 Q1/14 Q3/14 Q1/15 Q3/15 Q1/16 Q3/16 Q1/17

Industrial output YoY GDP YoY Construction output YoY (RA)

slide-19
SLIDE 19

Source: Bloomberg Source: Bloomberg

|19

Macroeconomic Update (2/2)

Loan-to-deposit ratio heading below 100% as credit growth remains tepid

Corporate loans and deposits (% YoY) Household loans and deposits (% YoY)

The risk premium in Polish assets has declined recently. Strong growth, better fiscal figures and favourable climate for emerging markets all contributed to lower yields and spreads. Household deposits decelerate as consumption accelerates. Lending is still sluggish and mortgage production remains in line with historical average. PLN strengthened in lockstep with bonds and equities. Current levels are probably in equilibrium and the case for significant change in either direction is weak at the moment.

Source: NBP Source: NBP

Corporate lending began to rebound at the beginning of 2017 – a likely sign of stronger investment activity. Deposit growth remains moderate.

Risk premium in Polish bonds declined markedly Investor Presentation – Q1 2017

  • 10%

0% 10% 20% 30%

Jan-11 Sep-11 May-12 Jan-13 Sep-13 May-14 Jan-15 Sep-15 May-16 Jan-17

Corporate deposits Corporate loans Corporate investment loans

  • 5%

0% 5% 10% 15% 20% 25%

Jan-11 Sep-11 May-12 Jan-13 Sep-13 May-14 Jan-15 Sep-15 May-16 Jan-17

Household deposits Household loans Mortgage loans 3,60 3,80 4,00 4,20 4,40 4,60

Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17

EUR/PLN USD/PLN CHF/PLN 4.60 4.40 4.20 4.00 3.80 3.60

PLN appreciation likely done

225 250 275 300 325 350 375

Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17

10Y PL-GER spread

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SLIDE 20

2015 2016 2017F

GDP growth (YoY) 3.8% 2.7% 4.0% Domestic demand (YoY) 3.4% 2.8% 4.5% Private consumption (YoY) 3.2% 3.6% 4.2% Investment (YoY) 6.6%

  • 5.5%

5.9% Inflation (eop)

  • 0.5%

0.8% 1.8% MPC rate (eop) 1.50 1.50 1.50 CHF/PLN (eop) 3.92 4.11 3.89 EUR/PLN (eop) 4.26 4.40 4.20 |20

2017 in forecasts and the impact on mBank Group

Macroeconomic environment and challenges for the banking sector

Key economic indicators Outlook for mBank Banking sector – monetary aggregates YoY

2015 2016 2017F

Corporate loans 8.2% 5.0% 9.3% Mortgage loans 7.0% 4.8% 0.4% Non-mortgage loans 6.2% 5.9% 7.3% Corporate deposits 10.3% 7.9% 9.7% Retail deposits 9.8% 9.7% 4.2%

Source: mBank’s estimates as of 03.04.2017.

Loan Loss Provisions (Neutral)

  • Resilient asset quality supported by good macroeconomic

situation and low unemployment

  • Small downside risk due to changing loan book mix
  • Business-driven costs to remain well-contained
  • Risk of higher contribution to the BFG under new deposit

guarantee scheme

  • Rising amortisation due to ongoing investments in IT

Total costs (Slightly negative)

  • Continued gradual increase of margin driven by changing

structure of loan portfolio

  • More limited room for reduction of funding costs

Net interest income & NIM (Slightly positive)

  • Constantly rising client transactionality and strong

acquisition in both retail and corporate segment

  • Selective adjustment of fees for some services

Net Fee & Commission income (Slightly positive)

Investor Presentation – Q1 2017

slide-21
SLIDE 21

|21

Agenda

Summary of Q1/17 in mBank Group

Key Financials Client acquisition and Market shares Development of retail and corporate new business

Analysis of Q1/17 Results

Development of Loans and Deposits Development of Income and Costs Loan Portfolio Quality Funding Structure Details Capital and Liquidity Ratios

Macroeconomic Update Appendix

Additional Information: Selected Financial Data Detailed Results of Business Lines

Investor Presentation – Q1 2017

slide-22
SLIDE 22

|22

Appendix

Additional Information: Selected Financial Data

Page No.

Detailed Results of the Business Lines

Page No. Consolidated Profit and Loss Account 23

Retail Banking 37-42

Consolidated Statement of Financial Position 24 Summary of Q1/17: Financial Results and Volumes 38-39 mBank Group’s Ratios 25 Loan Portfolio Structure in Poland 40 mBank Group’s Historical Performance 26-28 mBank in the Czech Republic and Slovakia 41-42 Net Interest Income & Margin 29

Corporates and Financial Markets 43-46

Fee and Commission Income 30 Summary of Q1/17: Financial Results and Volumes 44-45 Trading and Other Income 31 Financial Markets Activity: Market Shares 46 Balance Sheet Analysis: Assets & Liabilities 32

mBank Group’s Subsidiaries 47-52

Balance Sheet Analysis: Currency structure 33 Results of Consolidated Companies 48 Balance Sheet Analysis: Structure of loans and deposits 34 mBank Hipoteczny (mBH) and Covered Bonds Issuance 49-50 Balance Sheet Analysis: Loan portfolio structure 35 Leasing and Factoring 51 Balance Sheet analysis: Development of Capital Ratios 36 mBank Dom Maklerski (mDM) 52

mBank’s share price performance 53 Contact Details 54

Investor Presentation – Q1 2017

slide-23
SLIDE 23

|23

Appendix

Additional Information: Selected Financial Data Consolidated Profit and Loss Account

Summary Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries

Quarterly results (PLN thou.) Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Net interest income 676,418 684,443 718,712 753,270 749,007 Net fee and commission income 211,745 209,703 234,363 250,634 249,554 Dividend income 2,586 442 299 154 Net trading income 84,087 59,513 74,402 26,629 76,897

  • incl. FX result

71,817 66,065 82,162 50,407 76,407

Gains less losses from investment securities 3,427 244,755 2,350 10,749 1,636 Net other operating income

1

33,226 1,992 8,478 3,131 4,530 Total income 1,008,903 1,202,992 1,038,747 1,044,712 1,081,778 Total operating costs (480,772) (490,699) (499,887) (491,926) (577,691)

Overhead costs (427,045) (427,329) (447,196) (438,073) (526,609) Amortisation (53,727) (63,370) (52,691) (53,853) (51,082)

Loan loss provisions

(68,520) (117,743) (139,452) (39,679) (82,921)

Operating profit 459,611 594,550 399,408 513,107 421,166 Taxes on the Group balance sheet items (57,302) (89,011) (89,824) (92,802) (91,305) Profit before income tax 402,309 505,539 309,584 420,305 329,861 Net profit attributable to owners of mBank 307,782 388,504 230,479 292,517 218,778

1 Including the share in the profits (losses) of joint ventures;

Investor Presentation – Q1 2017

slide-24
SLIDE 24

|24

Appendix

Additional Information: Selected Financial Data Consolidated Statement of Financial Position

Assets (PLN thou.) Q1/16 Q2/16 Q3/16 Q4/16 Q1/17

Cash and balances with Central Bank

4 042 760 6 433 221 5 859 485 9 164 281 7 139 929

Loans and advances to banks

1 120 253 1 680 830 2 920 734 3 082 855 1 976 859

Trading securities

2 849 810 3 233 150 4 177 242 3 800 634 3 538 122

Derivative financial instruments

2 799 170 2 411 457 2 087 395 1 808 847 1 680 769

Loans and advances to customers

77 940 778 80 774 809 81 009 630 81 763 277 81 697 942

Investment securities

31 618 471 31 644 303 31 257 850 31 393 352 31 689 903

Intangible assets

512 481 503 561 501 917 582 663 577 955

Tangible fixed assets

722 279 722 792 710 268 757 371 737 261

Other assets

1 662 378 1 329 362 1 256 202 1 390 222 1 449 641

Total assets

123 268 380 128 733 485 129 780 723 133 743 502 130 488 381 Liabilities (PLN thou.) Q1/16 Q2/16 Q3/16 Q4/16 Q1/17

Amounts due to other banks

10 972 446 12 058 198 11 562 896 8 486 753 8 767 287

Derivative financial instruments

2 355 838 2 157 160 1 766 557 1 599 266 1 557 117

Amounts due to customers

81 133 851 85 302 300 85 188 225 91 417 962 88 744 037

Debt securities in issue

9 697 975 10 115 495 12 192 188 12 660 389 13 260 781

Subordinated liabilities

3 801 673 3 910 457 3 851 380 3 943 349 2 250 473

Other liabilities

2 679 200 2 392 876 2 248 936 2 584 622 2 570 402

Total liabilities

110 640 983 115 936 486 116 810 182 120 692 341 117 150 097

Total equity

12 627 397 12 796 999 12 970 541 13 051 161 13 338 284

Total liabilities and equity

123 268 380 128 733 485 129 780 723 133 743 502 130 488 381

Summary Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries

Investor Presentation – Q1 2017

slide-25
SLIDE 25

|25

Appendix

Additional Information: Selected Financial Data mBank Group’s Ratios

Financial Ratios Q1/16 Q2/16 Q3/16 Q4/16 Q1/17

Net Interest Margin (quarterly)

2.29% 2.25% 2.31% 2.35% 2.42%

Net Interest Margin YtD

2.29% 2.27% 2.28% 2.30% 2.42%

Net Interest Margin YtD (excl. CHF portfolio)

2.66% 2.63% 2.64% 2.65% 2.77%

Cost to Income Ratio (quarterly)

47.7% 40.8% 48.1% 47.1% 53.4%

Cost to Income Ratio YtD

47.7% 43.9% 45.3% 45.7% 53.4%

Cost of Risk (quarterly)

0.35% 0.59% 0.69% 0.20% 0.41%

Cost of Risk YtD

0.35% 0.47% 0.55% 0.46% 0.41%

ROE net (quarterly)

10.08% 12.85% 7.61% 9.81% 6.81%

ROE net YtD

10.08% 11.46% 10.18% 10.09% 6.81%

ROA net (quarterly)

0.99% 1.23% 0.71% 0.88% 0.68%

ROA net YtD

0.99% 1.11% 0.98% 0.95% 0.68%

Loan-to-Deposit Ratio

96.1% 94.7% 95.1% 89.4% 92.1%

Total Capital Ratio

19.01% 18.33% 18.61% 20.29% 21.59%

Common Equity Tier 1 Ratio

16.20% 15.61% 15.88% 17.32% 18.76%

Equity / Assets

10.2% 9.9% 10.0% 9.8% 10.2%

TREA / Assets

56.1% 55.4% 54.9% 48.8% 49.5%

NPL ratio

5.8% 5.8% 5.9% 5.4% 5.2%

NPL coverage ratio

58.6% 58.5% 59.5% 57.1% 59.4%

NPL coverage ratio incl. general provisions

64.0% 63.7% 64.4% 62.1% 64.7%

Summary Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries

Investor Presentation – Q1 2017

slide-26
SLIDE 26

CAGR

Net Interest Income & NIM (PLN M)

CAGR CAGR CAGR

|26

Appendix

mBank Group’s historical performance (1/3)

Net Fee and Commission Income (PLN M) Trading and Other Income (PLN M) Total Income (PLN M) 749 676

Q1/17

+11% +6%

Q1/16 2016

2,833

2015

2,511

2014

2,491

2013

2,226

2012

2,280 2.4% 2.2% 2.3% 2.1% 787 835 902 897 906 212 250 +18% +4%

Q1/16 2016 2015 2014 2013 2012 Q1/17

505 613 547 685 556 121 83

  • 31%

+2%

Q1/16 2016 2015 2014 2013 2012 Q1/17

4,093 4,295

2016 Q1/16

+5% +7% 1,009

2015 2014

3,939

2013

3,674

2012

3,571

Q1/17

1,082 2.3%

Summary Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries

2.3% 2.4% Investor Presentation – Q1 2017

slide-27
SLIDE 27

CAGR bps

|27

Appendix

mBank Group’s historical performance (2/3)

Operating Costs (PLN M) Pre-provision Income & C/I ratio (PLN M) Loan Loss Provisions & Cost of Risk (PLN M) Net Profit & Return on Equity (PLN M) 445 478 516 421 365 83 69

  • 5%

+21%

Q1/16 2016 2015 2014 2013 2012 Q1/17

219 308 0%

  • 29%

Q1/17 Q1/16 2016

1,219

2015

1,301

2014

1,287

2013

1,206

2012

1,197 46.5% 45.7% 44.9% 50.1%

CAGR CAGR

45.7% 14.6% 13.1% 13.1% 11.8% 10.1%

Summary Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries

66 70 72 54 46

CAGR

10.1% 6.8% 35 41 47.7% 53.4% 504 528

  • 5%

+5%

Q1/17 Q1/16 2016

2,332

2015

2,043

2014

2,169

2013

1,995

2012

1,909 445 444 194 37 +20% +4%

Q1/17 Q1/16 2016

1,952 11

2015

1,857

2014

1,771

2013

1,678

2012

1,661 132

One-off regulatory costs

Investor Presentation – Q1 2017

Contributions to the BFG

slide-28
SLIDE 28

Equity & Total Capital Ratio (PLN M)

CAGR

|28

Appendix

mBank Group’s historical performance (3/3)

Total Assets (PLN B) Total Gross Loans (PLN B) Total Deposits (PLN B)

18.73% 19.38% 14.66% 17.25%

Individual clients Corporate clients Public sector CAGR CAGR

20.29%

Summary Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries Individual clients Corporate clients Public sector and other CAGR

19.01% 21.59%

Investor Presentation – Q1 2017 +8%

+6%

03/17 13,338 03/16 12,627 2016 13,051 2015 12,275 2014 11,073 2013 10,256 2012 9,619

+6% +7%

03/17

130.5

03/16

123.3

2016

133.7

2015

123.5

2014

118.0

2013

104.3

2012

102.1 +4%

03/17

84.5

48.3 34.8

+5%

1.4 03/16

80.9

46.5 32.8 1.6 2016

84.6

48.9 34.2 1.5 2015

81.4

46.3 33.4 1.7 2014

77.4

41.6 32.8 3.0 2013

70.6

38.3 29.5 2.8 2012

69.5

37.7 28.4 3.4

+6%

+9%

+12%

03/17

88.7

53.8 33.6 1.4 03/16

81.1

47.8 32.6 0.7 2016

91.4

53.5 37.4 0.5 2015

81.1

46.1 34.4 0.6 2014

72.4

39.3 32.2 0.9 2013

61.7

34.2 26.8 0.7 2012

58.0

33.2 24.3 0.5

+9%

slide-29
SLIDE 29

6% 8% 29% 55% 2% 2% 2% 5% 72% 17%

NIM

[%]

|29

Appendix

Additional Information: Selected Financial Data Net Interest Income & Margin

Interest Income Structure (PLN M) Interest Expense Structure (PLN M)

Amounts due to banks Other Amounts due to customers Issue of debt securities Subordinated liabilities

  • 2.1%

Q4/16 1,003.3 16.7 174.0 25.3 718.1 46.922.3 Q3/16 977.0 14.1 180.1 18.8 700.5 43.220.3 Q2/16 947.1 14.5 175.5 17.1 671.3 47.621.1 Q1/16 945.5 12.0 178.4 15.8 24.3 59.116.9 Q1/17 982.5 663.3 170.8 20.8 44.5 707.0 15.2

  • 6.6%

Q4/16 250.0 16.9 143.0 68.4 17.7 4.0 Q3/16 258.3 20.4 157.7 60.0 17.2 3.0 Q2/16 262.6 18.6 164.2 60.2 17.0 2.6 Q1/16 269.1 19.3 173.8 56.9 16.7 2.4 Q1/17 233.5 13.8 128.3 67.7 18.2 5.5

2.29 2.25 2.42 2.35 2.31

Summary Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries

Cash and short-term deposits Loans and advances Investment securities Debt securities held for trading Derivatives classified into banking book Other 2%

Investor Presentation – Q1 2017

slide-30
SLIDE 30

20% 18% 12% 15% 8% 1% 22% 4%

|30

Appendix

Additional Information: Selected Financial Data Fee and Commission Income

Fee and Commission Income Structure (PLN M)

QoQ YoY

Q4/16 429.2 85.6 3.7 15.6 99.1 48.5 72.9 46.6 57.2 Q3/16 404.4 84.5 4.1 14.7 94.1 35.5 69.5 42.1 60.0 Q2/16 365.3 69.8 3.0 15.1 80.3 32.0 69.8 41.3 54.0 Q1/16 351.9 68.6 2.7 13.5 88.5 26.0 68.6 36.8 47.3 Q1/17 407.1 81.4 3.5 16.7 88.9 32.9 74.7 47.7 61.5

Credit related fees Accounts & money transfers Portfolio management Guarantees and trade finance Insurance activity Brokerage activity & securities issue Payment card fees Other (incl. custody)

  • 4.9%
  • 10.3%

+2.5% +18.7% +0.5% +9.0%

  • 32.2%

+26.4% +7.4% +29.9% +2.3% +29.7%

  • 6.6%

+27.0% +7.1% +23.5%

Summary Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries

Investor Presentation – Q1 2017

slide-31
SLIDE 31

|31

Appendix

Additional Information: Selected Financial Data Trading and Other Income

Net Trading Income Structure (PLN M) Gains less Losses from Investment Securities (PLN M)

FX Result Other Trading Income

+189% Q4/16 26.6 50.4

  • 23.8

Q3/16 74.4 82.2

  • 7.8

Q2/16 59.5 66.1

  • 6.6

Q1/16 84.1 71.8 12.3 Q1/17 76.9 76.4 0.5

  • 9%

Q4/16 10.7 Q3/16 2.4 Q2/161

  • 7.0

Q1/16 3.4 Q1/17 1.6

Summary Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries

1 Excluding gain on the settlement of Visa transaction (PLN 251.7 M);

Investor Presentation – Q1 2017

slide-32
SLIDE 32

68% 7% 10% 10% 5%

|32

Appendix

Additional Information: Selected Financial Data Balance Sheet Analysis: Assets & Liabilities

Structure of Assets (PLN B) Structure of Liabilities and Equity (PLN B) 12/16 133.7 3.1 81.7 3.8 1.8 31.4 11.9 09/16 129.8 2.9 81.0 4.2 2.1 31.3 8.3 06/16 128.7 1.7 80.8 3.2 2.4 31.6 9.0 03/16 123.3 1.1 77.9 2.9 2.8 31.6 7.0 03/17 130.5 2.0 81.7 3.5 1.7 31.7 9.9 12/16 133.7 8.5 91.4 12.7 13.0 8.1 09/16 129.8 11.5 85.2 12.2 13.0 7.9 06/16 128.7 12.1 85.3 10.1 12.8 8.4 03/16 123.3 11.0 81.1 9.7 12.6 8.9 03/17 130.5 8.8 88.7 13.3 13.3 6.4

Equity Amounts due to other banks Amounts due to customers Other Debt securities in issue Amounts due from banks Investment securities Loans and advances to customers Trading securities Other Derivative financial instruments

Summary Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries

63% 1% 24% 8% 1% 3%

Investor Presentation – Q1 2017

slide-33
SLIDE 33

18% 66% 3% 6% 7%

|33

Appendix

Additional Information: Selected Financial Data Balance Sheet Analysis: Currency Structure

Currency Structure of Loans to Customers (net) (PLN B) Currency Structure of Amounts due to Banks and Customers1 (PLN B)

1 Including amounts due to other banks and customers and subordinated liabilities;

55% 2% 22% 17% 4%

12/16 81.8 42.9 19.1 14.9 1.5 3.4 09/16 81.0 42.8 18.8 14.7 1.4 3.3 06/16 80.8 41.3 19.6 14.9 1.6 3.4 03/16 77.9 40.0 19.1 14.2 1.5 3.1 03/17 81.7 45.3 17.9 14.0 1.2 3.3 12/16 103.8 68.1 9.5 17.3 2.6 6.3 09/16 100.6 64.8 12.1 15.0 2.8 5.9 06/16 101.3 66.1 12.6 14.2 2.6 5.8 03/16 95.9 63.1 12.1 12.9 2.7 5.1 03/17 99.8 65.4 7.5 18.0 2.6 6.3 PLN Other (mainly CZK) USD EUR CHF PLN Other (mainly CZK) USD EUR CHF

Summary Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries

Investor Presentation – Q1 2017

slide-34
SLIDE 34

Corporate clients: current accounts2 PLN 26.5 B Public sector clients PLN 1.3 B Individual clients: term deposits PLN 14.6 B

61%

Individual clients: current accounts PLN 39.2 B

57%

Corporate clients: term deposits PLN 7.1 B

|34

Appendix

Additional Information: Selected Financial Data Balance Sheet Analysis: Structure of Loans and Deposits

Structure of mBank Group’s Gross Loans as of 31.03.2017 Structure of mBank Group’s Deposits as of 31.03.2017

1 Including local currency mortgage loans granted in Poland, the Czech Republic and Slovakia; 2 Including repo transactions, loans and advances received, other liabilities;

Mortgage FX loans to Individuals PLN 20.8 B Mortgage LC loans to Individuals1 PLN 13.4 B Non-mortgage retail loans PLN 11.8 B

Total: PLN 88.7 B

Corporate loans PLN 34.8 B Public sector loans and other PLN 1.4 B

Summary Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries

Mortgage loans to Microfirms PLN 2.3 B

Total: PLN 84.5 B

Investor Presentation – Q1 2017

41% 24% 16% 3% 14% 2% 30% 8% 44% 17% 1%

slide-35
SLIDE 35

|35

Appendix

Additional Information: Selected Financial Data Balance Sheet Analysis: Loan Portfolio Structure

mBank Group’s Sector Exposure by Industry as of 31.03.2017

A well diversified loan portfolio with granular structure

Summary Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries

Total: PLN 84.5 B

Investor Presentation – Q1 2017

57.2% 6.9% 4.5% 2.6% 2.6% 2.2% 2.2% 1.9% 1.6% 1.4% 1.4% 1.4% 1.2% 1.2% 11.6%

Households Real estate management Building industry Food sector Transport and logistics Wholesale trade Metals Motorization Chemicals and plastics Wood, furniture and stationery Construction materials Leasing and rental of movables Retail trade Power industry and heating services Other (below 1.01%)

slide-36
SLIDE 36
  • 0.05

+1.17 +0.28

  • 0.10

21.59%

Other2 Net profit retention FX impact

  • n TREA

Change in business

Q4/16

CURRENT

Q1/17

Adjustment of the method

Q4/16

PREVIOUS

18.35%

Other1

20.29%

FX impact

  • n TREA

Change in business

Q3/16 18.61%

Net profit retention FX impact

  • n TREA

Adjustment of the method Other1

18.76% 15.88% 15.66%

Net profit retention Change in business Net profit retention

Q4/16

CURRENT

17.32%

FX impact

  • n TREA

Other

Q1/17 Q4/16

PREVIOUS

Q3/16

Change in business

|36

Appendix

Additional Information: Selected Financial Data Balance Sheet Analysis: Detailed Development of Capital Ratios

mBank Group’s Common Equity Tier 1 (CET 1) Ratio mBank Group’s Total Capital Ratio

Summary Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries

+0.31 +0.18

  • 0.17

+0.36 +0.18

  • 0.20
  • 0.54

+1.66

  • 0.60

+1.94

1 Mainly due to negative valuation of available for sale (AFS) financial instruments; 2 Due to lower percentage of perpetual subordinated debt, which may be included in Tier 2 capital (50% in 2017);

Investor Presentation – Q1 2017

  • 0.05

+1.17 +0.24 +0.08

slide-37
SLIDE 37

|37

Appendix Retail Banking

Detailed Results

  • f the Business Lines in Q1/17

Summary Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries

Investor Presentation – Q1 2017

slide-38
SLIDE 38

|38

Appendix

Retail Banking Summary of Q1/17: Financial and Business Results

Profit before Tax of the Segment (PLN M, by quarter) Number of Retail Service Locations Number of non-cash transactions with payment cards (M, by quarter) Value of non-cash transactions with payment cards (PLN M, by quarter)

1 Including financial centres and agency service points (data revised for previous quarters);

122 121 116 115 112 84 84 88 98 102 47 46 44 43 43 36 36 36 37 37

06/16

303 12 4

03/16 12/16

20 8 316 17 6

09/16

304 14 6 304 11 4 322

03/17

84.2

Q1/17

105.9 +26%

  • 1%

Q4/16

106.8

Q3/16

102.9

Q2/16

97.9

Q1/16 Q4/16

7,283

Q3/16

6,794

Q2/16

6,480 +22%

  • 5%

Q1/17

6,907

Q1/16

5,665

Summary Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries mBank (former MultiBank) Advisory centres Light branches mKiosks (incl. Partner Kiosks) mBank CZSK mFinanse1 Retail Banking PL mBank CZSK Gain on Visa transaction

  • 3.4

227.4 230.9 0.7

Q4/16 Q1/17

+13% 0% 160.6 1.1

Q1/16

200.5 199.8 200.4 3.5 230.5

Q2/16

392.2 227.3 223.1 4.2

Q3/16

203.9 Investor Presentation – Q1 2017

slide-39
SLIDE 39

1 Currency and geographical breakdown based on management information;

Retail Banking Summary of Q1/17: Loans and Deposits

Appendix

Summary Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries Current accounts Saving accounts Term deposits Other

+0.6% +12.5%

12/16

53,495 18,398 19,653 15,381 63

09/16

50,735 16,785 18,648 15,237 65

06/16

49,453 16,440 18,610 14,349 54

03/16

47,835 15,230 18,284 14,272 49

03/17

53,829 18,993 66 20,119 14,651

|39

Gross Loans to Retail Banking Clients1 (PLN M) Deposits from Retail Banking Clients (PLN M)

  • 1.2%

+3.9%

12/16

48,950 9,557 22,126 3,687 2,350 11,231

09/16

48,119 9,272 21,775 3,577 2,345 11,150

06/16

48,272 8,872 22,658 3,690 2,532 10,520

03/16

46,511 8,523 22,119 3,465 2,507 9,897 20,774 3,484 2,326 11,804

03/17

48,338 9,949

8% 21% 48% 7% 24% 43% 38% 30% 32% 38% 27% 35% 18% 21% 5% 5%

PLN mortgage loans to Individuals Mortgage loans to Microfirms FX mortgage loans to Individuals granted in PL Non-mortgage loans Mortgage loans granted in CZSK

Investor Presentation – Q1 2017

slide-40
SLIDE 40

CAGR

|40

Appendix

Retail Banking Loan Portfolio Structure of mBank Group in Poland

Summary Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries

Market Shares in Household Loans in Poland Product Structure of Retail Banking Loan Portfolio in Poland as of 31.03.2017 mBank’s Gross CHF Loan Portfolio to Retail Clients (CHF M) Currency Structure of Retail Banking Loan Portfolio in Poland as of 31.03.2017

12/16

5.0% 7.5%

09/16

5.0% 7.5%

06/16

4.9% 7.6%

03/16

4.8% 7.6%

12/15

4.7% 7.7%

09/15

4.8% 7.6%

06/15

4.8% 7.7%

03/15

4.7% 7.6% 7.4%

03/17

5.1%

Non-mortgage loans Mortgage loans

  • 7%

2016 4,652 2015 4,994 2014 5,365 2013 5,749 2012 6,129 2011 6,501 2010 6,852 2009 7,213 03/17 4,562

  • 2%
  • 6%

Total Retail Portfolio Mortgage Loan Portfolio

46.5% 53.5%

PLN FX

32.7% 67.3% 3.8% 6.6% 8.6% 79.4% 1.6%

Other Credit cards Credit lines Cash loans Mortgage loans

Investor Presentation – Q1 2017

slide-41
SLIDE 41

Number of clients (thou.) Total revenues (PLN M) Gross Loans (PLN M) and Share in Total mBank’s retail volume Deposits (PLN M) and Share in Total mBank’s retail volume

|41

Appendix

Retail Banking mBank in the Czech Republic and Slovakia

CZ SK

Note: Volumes based on management information.

CZ SK

589 607 617 629 640 253 258 260 264 270 +17 +68

12/16

893

09/16

877

06/16

866

03/16

842

03/17

910

CZ SK

  • 12%

+3%

Q4/16

42.2 32.2 10.0

Q3/16

42.0 33.3 8.7

Q2/16

36.6 29.3 7.3

Q1/16

36.1 28.0 8.1 37.3 9.0 28.3

Q1/17

CZ SK

Summary Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries

8.5% 14.8%

Investor Presentation – Q1 2017 0% +20%

12/16

7,940 5,635 2,305

09/16

7,291 5,252 2,039

06/16

7,328 5,250 2,078

03/16

6,615 4,690 1,925

03/17

7,950 5,603 2,347 967 962 972 910

  • 5%

+2%

12/16

4,291 3,319

09/16

4,199 3,238

06/16

4,269 3,270 1,000

03/16

4,002 3,035

03/17

4,091 3,182

slide-42
SLIDE 42

Retail Banking mBank in the Czech Republic and Slovakia

Mortgage Loans (CZK M) Mortgage Loans (EUR M)

|42

Appendix

Customer deposits (CZK M) Customer deposits (EUR M) Non-mortgage Loans (CZK M) Non-mortgage Loans (EUR M)

Czech Republic

Clients: 639.7 thou. 2 light branches, 9 financial centres & 15 mKiosks

Slovakia

Clients: 270.4 thou. 2 light branches, 4 financial centres & 5 mKiosks +4% 0% 03/17 16,884 12/16 16,921 03/16 16,184 +16% +5% 03/17 3,286 12/16 3,121 03/16 2,835

  • 8%
  • 3%

03/17 180.5 12/16 186.7 03/16 196.8 +20% +7% 03/17 32.3 12/16 30.2 03/16 26.9

Note: Volumes based on management information.

+21% +4% 03/17 35,911 12/16 34,395 03/16 29,704 556.0 12/16 +7% 03/17 +23% 521.0 03/16 450.9 Investor Presentation – Q1 2017

Summary Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries

slide-43
SLIDE 43

|43

Appendix Corporates & Financial Markets

Detailed Results

  • f the Business Lines in Q1/17

Summary Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries

Investor Presentation – Q1 2017

slide-44
SLIDE 44

|44

Appendix

Corporates and Financial Markets Summary of Q1/17: Financial and Business Results

Profit before Tax of the Segment (PLN M, by quarter) Number of Corporate Service Locations Loans to enterprises1 (PLN M) Deposits of enterprises1 (PLN M)

1 Corporate loan and deposit volumes according to current NBP rules;

+8%

  • 11%

03/17

25,399

12/16

28,446

09/16

24,663

06/16

25,639

03/16

23,572 +3% +4%

03/17

20,753 987

12/16

19,950 951

09/16

20,364 1,045

06/16

20,070 1,060

03/16

19,917 1,141

loans classified as ’securities’ Summary

Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries

Corporate and Investment Banking Financial Markets

Łódzkie Zachodnio- Pomorskie Pomorskie Warmińsko- Mazurskie Podlaskie Mazowieckie Lubelskie Świętokrzyskie Podkarpackie Małopolskie Śląskie Opolskie Dolnośląskie Wielkopolskie Kujawsko- Pomorskie Lubuskie

2 2 1 2 1 1 4 3 2 1 2 3 1 2 2 1 1 3 1 2 2 1 2 2 1 1

29 17 21 8 5 mBank’s branches,

  • incl. 6 advisory centres

mBank’s offices mLeasing mFaktoring mBank Hipoteczny

  • 44%

Investor Presentation – Q1 2017

  • 43%

Q1/17

107.2 109.4

  • 2.2

Q4/16

189.0 188.9 0.1

Q3/16

96.8 67.1 29.7

Q2/16

112.6 109.4 3.2

Q1/16

191.0 133.2 57.9

  • 43%

Lower Q1/17 profit due to

  • ne-off booking of annual

contribution to the Resolution Fund

slide-45
SLIDE 45

Appendix

Corporates and Financial Markets Summary of Q1/17: Loans and Deposits

Summary Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries

  • 10.3%

+2.9%

12/16

37,383 13,672 12,358 6,280 5,073

09/16

33,829 12,152 11,214 5,476 4,987

06/16

35,119 13,975 10,777 5,221 5,146

03/16

32,618 13,262 10,461 4,465 4,430

03/17

33,551 12,100 12,663 4,665 4,123

|45

Gross Loans to Corporate Entities (PLN M) +1.9% +6.2%

12/16

34,174 4,462 12,224 2,568 5,237 4,965 4,718

09/16

34,528 4,939 12,397 2,512 5,146 5,030 4,504

06/16

33,937 5,032 12,135 2,480 5,116 4,870 4,304

03/16

32,805 5,184 11,981 2,427 4,830 4,728 3,655

03/17

34,841 5,275 13,346 2,838 5,337 4,731 3,314 Deposits from Corporate Customers (PLN M)

K1 K2 K3 mLeasing mBank Hipoteczny Other K1 K2 K3 Other

Note: Corporate clients split: K1 – annual sales over PLN 500 M and non-banking financial institutions; K2 – annual sales PLN 30 M to PLN 500 M; K3 – annual sales below 30 M.

Investor Presentation – Q1 2017

slide-46
SLIDE 46

|46

Appendix

Corporates and Financial Markets Market Shares

mBank’s Market Shares in Investment Banking Services1 mBank in the Market for Non-Treasury Debt2 as of 28.02.2017 (PLN M)

1 mBank calculations based on NBP data as of 28.02.2017; 2 Based on Fitch Polska S.A., Rating & Rynek (excluding BGK road bonds);

9.1%

Mid-term bank Debt

13,644 40,740

Corporate Debt

7,883 69,023

Short-term Debt

1,435 15,702

mBank Market

11.4% 33.5%

Treasury Bills and Bonds IRS/FRA FX Spot & Forward

15.9% 8.9% 17.6%

Summary Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries

#4 #4 #1

Investor Presentation – Q1 2017

slide-47
SLIDE 47

|47

Appendix Subsidiaries

Detailed Results

  • f mBank Group’s companies in Q1/17

Summary Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries

Investor Presentation – Q1 2017

slide-48
SLIDE 48

|48

Appendix

mBank Group’s Subsidiaries Development of Profit before Tax of Consolidated Companies

Summary Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries

1 Excluding one-off gain on the sale of shares of BRE Ubezpieczenia TUiR in Q1/15; 2 Companies were integrated into the organizational structure of mBank as of 20.05.2016; 3 Other subsidiaries include mFinance France, mCentrum Operacji, BDH Development, Garbary and Tele-Tech Investment (since Q3/15);

PLN thou.

Q1/16 Q1/17

Change YoY

2015 2016

Change YoY

mBank Hipoteczny 11,819 11,148

  • 5.7%

26,797 30,180 +12.6% mLeasing 20,462 16,864

  • 17.6%

57,221 72,550 +26.8% mFaktoring 6,210 2,218

  • 64.3%
  • 22,242

15,141

  • / +

mFinanse (p. Aspiro)

1

36,370 37,446 +3.0% 170,068 155,431

  • 8.6%

mLocum 10,745 937

  • 91.3%

17,900 18,273 +2.1% Dom Maklerski mBanku

2

3,234

  • N/A

28,248 2,852

N/A

mWealth Management

2

5,516

  • N/A

27,367 8,976

N/A

Other

3

  • 1,758
  • 1,242
  • 29.3%

44

  • 1,645

+ / - Total 92,597 67,370

  • 27.2%

305,403 301,758

  • 1.2%

Investor Presentation – Q1 2017

slide-49
SLIDE 49

|49

Appendix

mBank Group’s Subsidiaries mBank Hipoteczny (mBH)

Housing loans to individual customers (incl. new sales and pooling transactions) Public sector loans and other receivables Commercial loans

Profit before Income Tax (PLN M) Issuance of Covered Bonds (PLN M, by year) Gross loans and advances to customers (PLN M) Outstanding amount of Covered Bonds issued (PLN M, nominal value) 0% +15% 03/17 5,279 12/16 5,268 09/16 4,765 06/16 4,596 4,446 150 03/16 4,593 4,443 150

Mortgage covered bonds Public covered bonds established in 1999 specialised mortgage bank and the largest issuer of covered bonds in the Polish market

Summary Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries

  • 6%

Q1/17

11.1

Q1/16

11.8

2016

30.2

+24% Investor Presentation – Q1 2017 417 870 108 700 2017 2016 1,570 2015 1,541 2014 1,004 2013

Private placement

  • f EUR 70 million

and PLN 400 million 1 issue in EUR

+2% 03/17 9,730 4,731 4,862 137 12/16 9,516 4,965 4,411 140 09/16 9,179 5,030 4,001 149 06/16 8,498 4,870 3,474 154 03/16 7,821 4,728 2,931 162

slide-50
SLIDE 50

mBank Group’s Subsidiaries mBank Hipoteczny (mBH): Issuance Activity on the Covered Bonds Market

Appendix

|50

Amount Currency Issue date Maturity date Tenor (years) Coupon

7.5 M EUR 17-02-2014 15-02-2018 4.0 EURIBOR 6M+80bps 8.0 M EUR 28-02-2014 28-02-2029 15.0 Fixed (3.50%) 15.0 M EUR 17-03-2014 15-03-2029 15.0 Fixed (3.50%) 20.0 M EUR 30-05-2014 30-05-2029 15.0 Fixed (3.20%) 300.0 M PLN 28-07-2014 28-07-2022 8.0 WIBOR 6M+ 93bps 200.0 M PLN 04-08-2014 20-02-2023 8.5 WIBOR 6M+ 93bps 20.0 M EUR 22-10-2014 22-10-2018 4.0 Fixed (1.115%) 50.0 M EUR 28-11-2014 15-10-2019 4.9 EURIBOR 3M + 87bps 200.0 M PLN 20-02-2015 28-04-2022 7.2 WIBOR 6M+ 78bps 20.0 M EUR 25-02-2015 25-02-2022 7.0 Fixed (1.135%) 250.0 M PLN 15-04-2015 16-10-2023 8.5 WIBOR 6M+ 87bps 11.0 M EUR 24-04-2015 24-04-2025 10.0 Fixed (1.285%) 50.0 M EUR 24-06-2015 24-06-2020 5.0 EURIBOR 3M + 69bps 500.0 M PLN 17-09-2015 10-09-2020 5.0 WIBOR 3M+ 110bps 255.0 M PLN 02-12-2015 20-09-2021 5.8 WIBOR 3M+ 115bps 300.0 M PLN 09-03-2016 05-03-2021 5.0 WIBOR 3M+ 120bps 50.0 M EUR 23-03-2016 21-06-2021 5.2 EURIBOR 3M + 87bps 50.0 M PLN 28-04-2016 28-04-2020 4.0 Fixed (2.91%) 100.0 M PLN 11-05-2016 28-04-2020 4.0 Fixed (2.91%) 13.0 M EUR 28-09-2016 20-09-2026 10.0 Fixed (1.18%) 35.0 M EUR 26-10-2016 20-09-2026 9.9 Fixed (1.183%) 24.9 M EUR 01-02-2017 01-02-2024 7.0 Fixed (0.94%)

Summary Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries

Investor Presentation – Q1 2017 Summary of Mortgage Covered Bonds issued in 2014-2017 (public issues)

slide-51
SLIDE 51

Rank

#3

Leasing contracts (PLN M) Factoring contracts (PLN M)

|51

Appendix

mBank Group’s Subsidiaries Leasing and Factoring

Profit before Tax (PLN M) Profit before Tax (PLN M) Market share & position – Q1/17 Market share & position – Q1/17

7.5%

Rank

#8

7.1%

Source: Polish Factors Association (PFA) Source: Polish Leasing Association (PLA)

established in 1991 provides financial and

  • perating

leasing of cars, trucks, machinery and real estate established in 1995

  • ffers factoring

services, incl. domestic and export recourse and non-recourse factoring and import guarantees

Summary Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries

+12% Q1/17

1,129

Q1/16

1,011

+11% Q1/17

2,922

Q1/16

2,631

  • 18%

Q1/17

16.9

Q1/16

20.5

2016

72.6

Investor Presentation – Q1 2017

  • 64%

Q1/17

2.2

Q1/16

6.2

2016

15.1

slide-52
SLIDE 52

mBank Group’s Brokerage Services mBank Dom Maklerski (mDM)

|52

Appendix

mDM Bonds Trading on WSE and Market Share in Turnover (PLN M, by quarter) mDM Options Trading on WSE and Market Share in Turnover (thou. of contracts, by quarter)

Summary Historical view Profit & Loss Balance Sheet Business Lines Subsidiaries

Source: mBank calculations based on WSE data.

mDM Equities Trading on WSE and Market Share in Turnover (PLN M, by quarter) mDM Futures Trading on WSE and Market Share in Turnover (thou. of contracts, by quarter)

Q4/16

6,021 5.1%

Q3/16

5,074 4.4%

Q2/16

3,682 4.1%

Q1/16

3,701 4.0%

Q1/17

5.2% 7,211

Q4/16

93.7 10.0%

Q3/16

70.4 9.3%

Q2/16

36.0 5.2%

Q1/16

38.9 8.2% 5.0% 38.1

Q1/17 Q4/16

508.8 12.3%

Q3/16

386.1 10.9%

Q2/16

476.6 12.5%

Q1/16

498.5 13.5% 11.8% 508.8

Q1/17 Q4/16

20.0 9.0%

Q3/16

18.1 10.1%

Q2/16

15.6 9.1%

Q1/16

19.8 11.0%

Q1/17

8.5% 15.7 Investor Presentation – Q1 2017

slide-53
SLIDE 53

95 100 105 110 115 120 125 130

31-12-16 14-01-17 28-01-17 11-02-17 25-02-17 11-03-17 25-03-17 08-04-17

mBank WIG-Banks Index WIG-20 Index

WIG-30 2.201% WIG-20 2.406% WIG 1.552% WIG-Banks 5.770% WIG-Poland 1.597% |53

mBank’s share price performance in Q1/17

Polish banking stocks remain to be influenced by regulatory and legislative risks

mBank’s index membership and weights* mBank’s share performance v. main indices (rebased to 100)

  • Listed on the Warsaw Stock Exchange

since October 1992

  • The only share belonging to WIG-20 blue

chip index since its inception in April 1994

  • A strategic shareholder, Germany’s

Commerzbank, owns 69.4% of shares

* Share in index as of 18.04.2017 Source: WSE, Bloomberg (data as of 21.04.2017).

+16.2% +12.5% +17.1%

mBank’s share price in 2017

ISIN PLBRE0000012 Bloomberg MBK PW Number of shares issued 42 280 127

Investor Presentation – Q1 2017 01.01.2017 335.25 MIN (01.01.2017) 335.25 MAX (22.02.2017) 427.00 31.03.2017 373.50

slide-54
SLIDE 54

|54

Contact details

mBank’s Investor Relations at your service: E-mail address: investor.relations@mbank.pl Investor Relations website: www.mbank.pl/en/investor-relations/ mBank Analyzer: analyzer.mbank.pl

Ernest Pytlarczyk

Head of Investor Relations and Group Strategy, Chief Economist

Direct dial: +48 22 829 14 34 E-mail: ernest.pytlarczyk@mbank.pl

Joanna Filipkowska

Deputy Head of Investor Relations

Direct dial: +48 22 829 04 53 E-mail: joanna.filipkowska@mbank.pl

Paweł Lipiński

Direct dial: +48 22 829 15 33 E-mail: pawel.lipinski@mbank.pl

Marta Polańska

Direct dial: +48 22 438 31 09 E-mail: marta.polanska@mbank.pl

Monika Zaręba

Direct dial: +48 22 829 08 18 E-mail: monika.zareba@mbank.pl mBank S.A. Investor Relations and Group Strategy

  • ul. Senatorska 18

00-950 Warszawa